The precise source of this popular phrase
is actually in question, although it certainly was already in widespread
use by the time Alice in Wonderland
was published in 1865. Personally, I agree with thefez
and feel the term derives from the fact that hatters were driven mad
because of poisoning by the mercurous oxide
used during the felt tanning
process. Others contend that it derives from "mad as an adder
," meaning "as dangerous as a snake". It's quite possible that this phrase was first used in reference a particular mad hatter
, 17th-century Englishman Robert Crab.
If you're interested in seeing pre-Alice uses of the phrase, you can find it in Thomas Haliburton's The Clockmaker (1836) and William Makepeace Thackeray's Pendennis (1850).